If you receive a wage garnishment, knowing your rights may save you hundreds of dollars!

It is a common misconception that a creditor can automatically garnish your wages if you fail to pay your debts!

If a debt collector is unsuccessful in collecting for unpaid debts, they may decide to file a claim in your local county court.

You would receive a SUMMONS, which is usually hand delivered to you.

The summons basically states that you have 20-30 days (varies by state) to "answer" the claim.  An answer is what you would do if you disputed the claim.  To file an answer will usually cost you a court fee and is a waste of time and money if you owe the debt.

If you do not contact the collector and arrange a repayment plan, usually called a STIPULATED AGREEMENT, then a court date is set and the creditor or PLAINTIFF will be awarded a DEFAULT JUDGEMENT.

In other words, the creditor wins the judgment by default because there was no reason for you to contest the claim since you owe the debt.

So now that the creditor has the judgment, what can the creditor do?

If you have a job and earn normal, W-2 income, your creditor can apply for a WRIT OF GARNISHMENT. This will be sent to your employer and the employer has no choice but to comply with the WRIT.

DON'T PANIC! There are several sources of income that are exempt from garnishment:

If you receive any of the following types of income, they are exempt from wage garnishment:

• Social Security benefits
• Supplemental Security Income (SSI)
• Welfare or public assistance
• Spousal support or child support
• Public or private pensions
• Veterans benefits and/or loans
• Disability proceeds of life insurance policies
• Cash surrender value of life insurance policies
• and many others

For a complete listing see Oregon Garnishment Forms.

Let's say you earn $15 per hour and work 40 hours per week.

     $15 x 80 hours =                                     $1200

2.  Total deductions withheld by law                $ 360

3.  Net Disposable Wage (2-1)                        $ 840

4.  Normal exemption (OR 75% of line 3)          $ 630

5.  Minimum exemption (OR $435 for 2 wks)      $ 435

6.  Greater of line 4 or 5 = exempt wages          $ 630

7.  Nonexempt wages (6-3)                             $ 210

In this example, $210 would be withheld from your BI-Weekly check to satisfy the garnishment until the entire amount of the debt is repaid!

If you are SELF EMPLOYED, receiving 1099 or commission income, is is unlikely that an attempt of wage garnishment by a collector will be successful.

Click below for FREE INFORMATION

How to Stop Wage Garnishment

How to Eliminate Your Debt for Less

How to Stop Collection Calls

If you have questions or would like more information, please give us a call!

877-492-4109

Have you heard of Credit Card Skimming?  No? Well, neither had I until today and yet I was a victim of it several months ago.  I've often wondered how someone was able to clone my card and go on a shopping spree at the Home Depot.  Today I finally got my questions answered.  

Here's how they did it:

Thanks to those magnetic strips on the back of credit cards, you can pay for gas at the pump or buy groceries at the checkout with one quick swipe through a card reader.

We all love this because it is convenient, but thieves have used this technology to create a new kind of fraud -->> Credit Card Skimming. It's one more danger we must guard all watch out for and another maddening example of how crooks find ways to turn technology against us.

Here's how it works

The bad guys buy magnetic card readers (readily available online) and attach them to legitimate card readers at ATM machines, gas station pumps, movie rental kiosks, or anywhere they think they can get away with it.

The counterfeit card reader captures the credit card information of everyone who uses the machine. (On ATM machines, crooks also attach tiny video cameras to steal PIN numbers.)

They then remove the phony device and use the stored information to buy stuff online or write the data onto new magnetic strips to make counterfeit credit cards or ATM cards.

Counterfeit Credit Card Trends

Portable skimmers (small enough to fit in a palm) can be used by anyone who handles your credit card, such as a waiter. All they have to do is get your card out of your sight for a second. That's enough time to swipe it through the device, and steal your information without you suspecting a thing.

Here's an example of what a credit card skimmer would look like on an ATM machine.  Notice the tiny pinhole camera.  Who would even think to look for that?

Follow these tips to protect yourself from Credit Card Skimming:

• Don't let your credit card out of sight. Watch carefully anyone who handles your card.

• Keep track of receipts and check your credit card statements regularly to make sure you authorized all purchases.

• Report any unauthorized purchases immediately to your credit card companies.

• Don't use a credit card reader if there are any signs of tampering. Don't swipe your card through devices that offer to clean the magnetic strip. Those are scams designed to capture your credit card information.

Have you been a victim of Credit Card Skimming?  If so, how did you resolve the issue?  I'd love to hear your story.  Let's chat in the comment stream below!

photo by: shawnzrossi

Need help eliminating your credit card debt?

Our Debt Consolidation and Debt Settlement programs can get you out of debt fast and save you money.  Click on the FREE Debt Summary link to get more information!

If you are behind in your credit card payments, it won't be long before you are contacted by debt collectors!

Here are 3 Illegal Debt Collection Practices to look out for!

#1  CALLING OVER AND OVER AT ALL HOURS OF THE DAY

According to the Federal Trade Commission (FTC) which enforces the Fair Debt Collection Practices Act (FDCPA), collectors are prohibited from using abusive methods to try to collect a debt.

A collectors main tatic is INTIMIDATION and their favorite method is to call several times a day at all hours.

The FDCPA states that a collector MAY NOT contact you before 8am (your time zone) or after 9pm at night.

#2  HARASSMENT

Again, the FDCPA specifically states that a debt collector MAY NOT:

• Use any threat of violence or harm
• Publish your name on a list of people who refuse to pay their debts
• Use obscene or profane language, including telling you how bad a person you are for not paying your bills!

#3  MAKING FALSE STATEMENTS

A debt collector also MAY NOT:

• Falsely claim to be an attorney or government representative
• Implying that you have committed a crime
• Falsely claim that they work for a credit reporting agency
• Tell you that you may be arrested if you don't pay
• Flasely claim that they will seize, garnish or sell your property UNLESS they are permitted by law to take action or THEY FOLLOW THROUGH.
• Send you anything that looks like an official court document if it isn't


What can you do if you have been a victim of these Illegal Debt Collection Practices?

To put a stop the harassing phone calls, you need to send a letter demanding that they stop.

Click here for a FREE GUIDE TO STOP THE CALLS.

You can contact your state's attorney general's office or the FTC to file a complaint. Most state's have separate divisions to handle consumer complaints.  (For example, in Oregon, you would contact the Oregon Department of Justice.)

If you feel overwhelmed, you may want to contact an experienced company that specializes in helping people deal with debt.

The point is...YOU DON'T HAVE TO TAKE IT!

I've heard a lot of buzz lately about the Debt Snowball method of paying off your debt.  Curiosity finally got the better of me and I decided to do a bit of research.  Here is what I discovered:

What is debt snowball?

Debt snowball is a process by which you list all your debts from lowest to highest and attack the lowest debt first. You need to pay minimums on each bill except for the lowest one. Pay as much as you can towards the lowest debt so that you can get rid of it as soon as possible. Next, you move on to the second lowest debt and the process continues till you are free from debt.

What are the advantages of debt snowball?

According to personal finance guru Dave Ramsey, “Personal finance is 20% head knowledge and 80% behavior”. Debt snowfall is based on this view. It rightly assumes that paying off smaller debts gives a sense of victory which motivates people to pay off all other debts.

It is relatively easy to pay off bigger debts using debt snowball method. Here you clear the smaller debts first. So by the time you reach the bigger debts, the extra amount that you can pay towards them increases. Consequently, it is possible to eliminate them quicker.

Another advantage of debt snowball method is the reduction of the total amount owed to creditors in a single month. This can save your neck in case you encounter an unforeseen situation like loss of job or medical emergency.

Is debt snowball the right choice for you?

Debt snowball is a simple debt reduction method which is suitable for people who have a wide range of balances. It gives you tangible results and motivation which is missing from other similar approaches. While is it most effective for people who need some encouragement in the form of quick results, individuals with a lot of patience will benefit more with avalanche approach because it is cheaper.

Debt snowball can certainly help you to climb up from the trenches. However, you should remember that it cannot make you debt free with the wave of a wand. But if you stick to it till the end then your patience will be certainly rewarded.

What if you can't even keep up with the minimum payments?

The debt snowball method sounds like a great idea, and for a lot of people it would make sense.  But what do you do if you can't even keep up with the minimum payments? 

If you need to get your minimum payments reduced, you should consider a Debt Consolidation program.  A Debt Consolidation program works along the same premise, but it also reduces your interest rates and monthly minimum payments!

If the payments of a Debt Consolidation program are still too high, then it's time to consider Debt Settlement.  A Debt Settlement program will significantly lower your monthly payment and eliminate your debt for less than what you owe. 

It's hard to decide which approach is your best option.  If you would like a free analysis of your current financial situation and some guidance in determining which option is right for you, our trained Solutions Specialists are here to help! 

Get answers TODAY 877-492-4109

What are your thoughts on the Debt Snowball?  Have you tried this method or are you considering it?  I'd love to hear from you.  Please post your thoughts or questions in the comment form below!

photo by: House Of Sims'

Beware of credit repair scams! 

Many so-called Credit Repair companies make claims like:

• "We can remove bad loans, bankruptcies, judgments and liens and improve your credit score!"
• "We can erase bad credit!"
• "Bad credit history?  We can improve your credit score in 30 days!"


Sound a little too good to be true?

Credit Repair companies target consumers with bad credit histories or low credit scores promising to clean up or eliminate negative items on their credit report...FOR A FEE!

You may have received a call or email and wondered..."How did they get my name and information?"

The credit reporting agencies sell information to companies! 

Nice to know!

Anyway, the truth is, these companies cannot provide an improved credit report by using methods or tactics that you could not do yourself!

Step 1:

If you haven't done so already, request a FREE copy of your credit report from each of the 3 major credit reporting agencies:

• Equifax
• Experian
• TransUnion

You can receive your FREE report by going to www.annualcreditreport.com

Step 2:

If you find inaccuracies and/or errors, you will dispute them by:

Write a simple dispute letter stating the dispute and provide copies of documents that support your dispute:

• Paid off statements
• Settlement agreement with copy of processed check
• copy of the error on the credit report

Step 3:

Mail your letter with supporting documents to the credit reporting agencies by CERTIFIED MAIL, return receipt requested so that you can document that the agency received it.

For addresses of the three major credit agencies, click here.

Credit reporting agencies must investigate your claims within 30 days.

They must forward all the relevant data that you provided to the company to the company.

Once the information provider receives notice of a dispute from the consumer reporting agency, it is required to:

• investigate
• review the relevant information
• report the results back to the credit reporting agency

If the investigation proves that your dispute is true, the information provider has to notify the credit reporting agency so that they can correct it in your file.

As you can see, this may take some time and effort, but you could certainly save yourself several hundred dollars by doing-it-yourself.

For a complete report from the Federal Trade commission, click below:  Credit Repair: How to Help Yourself

1)  KEEP MAKING MINIMUM PAYMENTS

The credit card industry loves this!  They know that if a consumer just makes the minimum payment each month, it may take 10-15 years before they ever pay off the account.

When you add up all of the interest and fees they charge, you could end up paying 3-4 times the original amount you charged!

2)  SECOND MORTGAGE OR EQUTIY LOAN

If you have equity in your home, you may be able to qualify for a 2nd mortgage or equity line of credit.

BUT BEWARE!  Right now, these credit cards are UNSECURED.  If you default, you have not pledged anything as collateral.

If you take out a loan against your home's equity and default, your home is at risk!

On the other hand, if you are disciplined enough to pay off the 2nd or equity line quickly, you could end up saving thousands of dollars in interest and fees.

3)  DEBT MANAGEMENT PROGRAM

If you are able to make the minimum payments and maybe a little more, then you should consider a DEBT MANAGEMENT PROGRAM.

If you qualify:

• You will have ONE MONTHLY PAYMENT
• Th payment is disbursed to each of your creditors for you
• Most creditors will LOWER your INTEREST RATE and ELIMINATE late or over-the-limit fees
• Creditors will not be calling
• You should be DEBT FREE in about 48 months or so

 4) DEBT SETTLEMENT PROGRAM

It is not unusual for people in today's economy to find themselves in a financial situation they have never been in before.

This could be due to several factors including:

• Unemployment
• Reduced hours
• Medical bills
• Divorce

If this is the case and you CANNOT AFFORD THE MINIMUM PAYMENTS, much less the payments required by a Debt Management Program, the a DEBT SETTLEMENT PROGRAM may be you best option to pay off credit card debt.

In this program, an amount of money you can afford is set aside so that at some time in the future, an offer to settle your account can be made.

You may be able to settle your accounts at 50% of the balance.

But, DEBT SETTLEMENT IS NOT EASY and most people cannot do it by themselves.

You may want to consider seeking professional help.

5) BANKRUPTCY

If you cannot make the payments required by either a Debt Management Program or a Debt Settlement Program, then your only option may be bankruptcy.

DON'T PANIC!

Get an appointment with a couple of BANKRUPTCY ATTORNEYS in your area.

There should not be any charge for your initial consultation.

You most likely will qualify for a Chapter 7 or 13, and the attorney will explain the differences.

If you would like a FREE CONSULTATION with NO OBLIGATION, then click below and we will send you some information that may be very helpful.

photo by: alancleaver_2000

You recieved a summons, now what?

If you have past due accounts and can't afford to make any payments, sooner or later you will get a summons.

It may be delivered by a police officer or someone else, but regardless, it is not a pleasant experience.

What should you do?

DO NOT IGNORE THE SUMMONS!

For the sake of this article, we're taking about unsecured debts such as:

• Credit cards
• Personal loans
• Medical bills
• Personal line of credit
• Store cards, etc.

When a creditor cannot get a consumer to pay as agreed and attempts to work out a plan or even after collector intimidation (you know...10 phone calls a day!), they may choose to start legal action in order to collect the debt.

A CLAIM will be filed in the county court where you reside. 

Then, you will receive a SUMMONS.  This is usually hand delivered.

The summons will state something to the effect that you have 20 or 30 days after receipt of the summons to APPEAR IN COURT TO ANSWER THE CLAIM.

That means that if you wish to dispute the validity of the claim, you can follow your county's court procedure to give an ANSWER TO THE CLAIM.

The answer is your side of the story if you feel you do not owe the amount of the claim.

Now, just because you don't like the additional interest, late fees and now court costs that have been added to the claim doesn't matter! 

So, if you owe the debt, there is no reason to spend the time or money for an answer and NO, YOU DO NOT NEED TO GO TO COURT.

OK, NOW WHAT?

FIRST DON'T PANIC!

• You are not going to jail
• You most likely will not go to court
• Since we're talking about unsecured debt, no one is going to take your personal property
• Your not going to have to sell your home, car, boat, etc.

The creditor is hoping that you will call them and make arrangements for full repayment of the debt (plus all the interest, fees and costs) as you are afraid.

AFRAID OF WHAT?

If an arrangement or agreement cannot be reached, the creditor or PLAINTIFF, will be awarded the JUDGMENT.

With a judgment entered in favor of the plaintiff, they can now seek to:

• Garnish your wages or
• Levy you bank account

CONTACT THE CREDITOR OR ATTORNEY FOR THE CREDITOR! 

If you are employed (not necessarily self-employed) and receive normal W-2 wages, then you must try to work out a repayment plan so that they don't proceed with a writ of garnishment.

Most of the time the creditor or attorney will agree to a STIPULATED AGREEMENT OR JUDGMENT.

This says that if you make $XX.00 payments for some many months they will not continue with legal action.

If you get an agreement, MAKE SURE YOU GET IT IN WRITING!

You most likely will make a "check-by-phone" arrangement whereby they take the monthly payment directly from your checking account, so keep good records.

If you have access to make a one-time or lump-sum payment for 60%-80% of the balance, the creditor may accept that and remove the judgment.

Again, if you arrange this, GET IT IN WRITING!

BUT WHAT IF YOU ARE UNEMPLOYED, SELF EMPLOYED OR RETIRED?

Certain forms of income are exempt from wage garnishment:

• Unemployment income
• Social Security or Pension income
• Disability income
• Child support
• And in most states, net income

For more information about wage garnishment, visit: US DEPARTMENT OF LABOR.

If all of this is a little intimidating, we can help!

For a FREE, NO OBLIGATION review of your situation, click here.

We get dozens of calls each year around tax time asking about the 1099-C IRS form.

If in the last taxable year you or a Debt Settlement Company had negotiated a settlement on one of your unsecured accounts, you will most likely receive a 1099-C form if the amount was over $600.

Unfortunately, many tax preparers don't know how to have settled or forgiven amount excluded from taxable income.

The most important question is:

"At the time of forgiveness (IRS term for settlement), were you INSOLVENT?"

What is INSOLVENT?

In IRS Form 4681, it gives the typical, a little hard to understand explanation of what the IRS deems INSOLVENCY to mean.

Basically, if your total assets are less or equal to your total liabilities, then you were INSOLVENT at the time of forgiveness and therefore the forgiven amount is excluded from additional taxable income.

What do you need to do?

List all of your assets:

• Equity in your home
• Equity in you car or cars
• Cash in the bank or retirement accounts
• Net value of any other property (rental, furniture, jewelry, collections, etc.)

List all of your liabilities:

• mortgage you still owe (maybe a 2nd as well)
• Amount you still owe on your car or cars
• All of your unsecured debt (including the final balance of the debt forgiven.
• All loans, student loans, medical bills outstanding, etc.

Subtract the total liabilities from total assets.

If you are equal or negative, then you were INSOLVENT at the time of the settlement or forgiveness and therefore the amount WILL NOT BE INCLUDED AS TAXABLE INCOME.

When you mail your tax form, you will include:

• A brief (brief) statement that you were INSOLVENT at the time of the settlement and that this amount should be excluded from taxable income.
• Copy of your Assets vs. Liabilities
• IRS Form 982

You can get a copy of IRS Form 982 by clicking here.

Put your name and Social Security number in the boxes at the top.

Check the box in Part 1, 1-b that states, Discharge of indetedness to the extent insolvent (not in a title 11 case).

That should do it.

If you would like more information about the IRS's definition of INSOLVENTCY, see IRS Form 4681, page 5.

If you feel overwhelmed and need some FREE ADVICE, or you need more help with the 1099-C, please click on our FREE DEBT SUMMARY link.

 photo by: Horia Varlan

It is important to know what is not a factor in a credit score as well as what is included!

We get asked this all the time and it is important that you understand not only what is in your credit score, but also what is not.

According to FICO, they consider several different factors when to determine your credit score.  But, they do not consider:

Race, color, religion, national origin, sex or marital status.

This would also not include whether or not you receive public assistance or if you exercise your rights under the Consumer Credit Privacy Act.

Your occupation, title, employer or salary as well as the date you were employed or employment history.

But, although this may not be a factor in determining your credit score, lenders may consider this information.

Your age.

Even though some types of scores may consider your age, FICO scores do not.

Where you live.

Any items reported as child/family support obligations or rental agreements.

Certain types of inquiries or requests for your credit report.

There is a misunderstanding that if you make a personal request for your credit report that it will have a negative impact on your score.  NOT TRUE!

Your score does not count "promotional inquiries"or requests made by lenders in order to make you a "pre-approved" credit offer.

If a current lender makes an "administrative inquiry" - requests made by lenders to review your account with them, this is not a factor of your credit score.

Nor are inquiries from your employer.

For a more complete explanation about the effects of inquiries about your credit report, click here.

If you have enrolled in a credit counseling or debt management program of any kind. 

That's good news if you are enrolled in a DEBT MANAGEMENT PROGRAM OR If you are considering a DEBT MANAGEMENT PROGRAM.